Australian Uranium Miner Buys Anglesey Copper Mine

by A N Timony
(UK)

Perth based Western Metals Limited (WMT) has made an offer of £13.75 million for the Parys Copper Mountain owned by Anglesey Mining plc. The offer will be partly in cash with the balance in shares in WMT.

Parys mountain has been dormant for about a century, and it is over 30 years since a mine was reopened and brought into production in the UK.

WMT plans to do a major drilling programme both on the surface and underground, with a target of getting the mine ready for production within 2 years at a cost of between £5 m and £7 m.

Anglesey Mining plc have carried out a number of investigations over recent years and assays have shown that there a significant deposits of zinc, copper and lead, with smaller concentrations of gold and silver.

Before the i’s are dotted and the t’s are crossed WMT will have exclusive rights to carry out a feasability test on the mine, which is expected to last up to 120 days.

This is a routine part of the “due diligence” process and will reassure WMT shareholders that the proposed purchase price offers fair value for the estimated output levels.

Now is a very interesting time in the context of the global commodities cycle, with many wise forecasters predicting that the boom in natural resources will extend for at least the rest of this decade.

The IMF has in a recent report stated that though the US economy is weak and may go into recession, the demand for copper , zinc and other base metals will continue to be very strong from China and India.

China is still expected to grow by 9.3% this year, while India should post growth of 8.7% at a time when the world economy is under strain from the credit crunch.

And the World Bureau of Metal statistics states that China is now the largest consumer of copper and zinc, the two main metals to be mined at Parys Mine, Amlwch.

In this global context it is not surprising that WMT is optimistic about taking on the task mining copper and zinc on Anglesey. The company is already involved in joint ventures in Colorado, USA and in Peru, along with an arrangement with Giant mining company BHP Billiton in a Queensland operation.

It also has very promising results showing high grade uranium oxide(U308)ore from its mining operations at Henri and Mtonya, south west Tanzania, where it is in a joint venture with URA Resources.

So it will be interesting to see what happens when the 120 day feasability study period expires and what projections are made for local job creation, considering that Anglesey Mining had previously projected up to 100 jobs could be created at Parys Mountain.

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